Johnson and Starmer have been in partnership as political lobbyists for many years. The partnership income statement for the year ended 31 March 2021 is detailed below:-

  ££                                                                                       Notes

Gross trading profit                                                         250,000

Add: other income

Client gratuity for a job well done                                    1,000

Bank interest received                                                             30

                                                                                            251,030

Less: Expenses

Manpower costs                                                                96,800  ¹

Office expenses                                                                   8,270

Communication costs                                                         4,000  ²

General expenses                                                             10,100  ³

Professional fees                                                                 3,750  ⁴

Motor and travelling                                                        15,550   ⁵

Provision for bad debts                                                     2,000   ⁶

Insurances                                                                            6,000

Depreciation                                                                        5,100     151,570

Net profit for the year                                                     99,460

Notes

1. Manpower costs included payments to the partners’ spouses. Each spouse was paid £5,000 for duties that had a commercial value of £7,500.

2.  Communication costs include £3,100 for office phones and £900 for the partners’ home telephone costs. It is estimated that the home telephones are used 25% privately.

3. General expenses includes: Entertaining customers (£1,200), entertaining staff (£900), and a fine (£2,000) for a Data Protection Breach.

4. Professional fees are: legal fees for the renewal of the 10 year office lease (£1,000) and a payment of £2,750 to the firm’s accountants for the preparation of the annual accounts.

5.  Motor and travelling includes £4,000 and £3,000 respectively in respect of Johnson’s and Starmer’s total car expenses. The total miles and business miles for each of the partner’s cars for the accounting year were Johnson: 12,000 and 6,000 and Starmer: 10,000 and 7,000. The rental costs of a leased car used by an employee were also included. The car had CO2 emissions of 175 g/km and the leased costs for the year were £3,200.

6. The provision for bad debts includes a customers bad debt written off when the customer became bankrupt £2,500 and the recovery of part of a bad debt (£500) written of in the accounts two year’s ago that was received this year by the partnership.

7.  Capital allowances of £ 2,000 have been calculated as due for the year.

 

Required

Calculate Johnson and Starmers’s taxable profits (start with the net profit figure of £99,460 and include adjustment entries for notes 1 to 7 showing a zero (0) if no adjustment is required).